Well-known incubator Rocket Internet has launched a new venture in Germany — Zencap, a digital credit marketplace for small and mid-sized enterprises to get financing without having to go through banks.

Zencap essentially forms a bridge between entrepreneurs and private investors, allowing SMEs to apply for financing directly from Zencap. Entrepreneurs can apply for a loan in the range of €10,000 – €150,000, with a term of six to 60 months, after which the startup’s creditworthiness will be checked, and Zencap will propose a non-binding offer based on the firm’s risk class and the loan’s term. Only then will the credit project appear on Zencap’s website.

Dr. Christian Grobe, the founder and director of Zencap, says that about 99 percent of companies in Germany are small or medium-sized, accounting for a total annual revenue of €2 billion ($2.75 billion). “However, credit financing is a bureaucratic and tedious process that often ends in frustration… It is our goal to dismantle these barriers by providing an easy and unbureaucratic alternative to banks,” he says.

To this extent, Zencap also offers more flexibility such as letting entrepreneurs repay loans early without additional fees.

In terms of benefits for investors, Zencap lets them diversify their portfolio across five different risk classes and receive returns of 2.3 percent – 13.9 percent. An investment doesn’t necessarily need to be that substantial either — an investor can put in any amount starting from just €100 ($138). Furthermore, investors can get interest and principal repayments on a monthly basis.